Benedict Evans of Enders Analysis in London tracks the big companies that manage so much of the environment and ecosystem in which publishers operate. In this presentation, he will review the strategies of Amazon, Apple, Facebook, Google, and Microsoft, with a special focus on the aspects of their activities that affect book publishers. Then Evans will talk about how publishers can best take advantage of the opportunities these companies make available while avoiding the pitfalls of dancing with partners who dwarf the publishing industry—let alone any single player—in size.

1. MOBILE IS EATINGTHE
WORLD
Presented at BEA, May 2013
Benedict Evans
@benedictevans
Enders Analysis

2. 0
50
100
150
200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Global annual unit sales (m)
Corporate PCs Consumer PCs Tablets
The state of PCs
Source: Gartner, IDC, Enders Analysis2

3. 0
200
400
600
800
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Global annual unit sales (m)
Corporate PCs Consumer PCs Tablets Smart phones
Smart phones are exploding
3 Source: Gartner, IDC, Enders Analysis

4. 0
500
1,000
1,500
2,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Global annual unit sales (m)
Corporate PCs Consumer PCs Tablets Smart phones All mobile phones
4
More mobile growth coming
Source: Gartner, IDC, Enders Analysis

5. 0
250
500
750
1,000
1,250
1,500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e
Global annual unit sales (m)
PCs Smartphones and tablets
Source: Enders Analysis5
The future is mobile

6. The world in 2017
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Population Adults Literate adults Mobile Smart phones PCs Tablets
2017 forecast base (m)
Source: GSMA,World Bank, Enders Analysis6
2012 Growth to 2017

7. • Mobile was always much bigger than tech, but always separate
• Smartphones mean theTechnology and Mobile worlds merge
• Internet and Media are being dragged along
• Tablets accelerate the change
• This is changing everything
Fundamental change
7

8. Fundamental change in scale
PC industry
• 350m PCs sold in 2012
• 1.6bn units in use
• Replaced every 4-5 years
• Shared
Mobile industry
• 1.7bn phones sold in 2012
• 3.2bn mobile users
• Replaced every 2 years
• One per person
8

9. Fundamental change in use
PC internet
• Shared, or used at work
• Semi-portable at best
• Web and web search
Mobile internet
• Personal
• Taken everywhere
• Web, web search, apps,
social, location, service
integration, prediction,APIs,
image recognition, NFC...
9

10. 0
25
50
75
100
Mar-2009 Sep-2009 Mar-2010 Sep-2010 Mar-2011 Sep-2011 Mar-2012 Sep-2012 Mar-2013
Microsoft share of connected device unit sales (%)
Source: Enders Analysis10
The irrelevance of Microsoft

11. 0
25
50
75
100
Units Revenue Operating Profit
Global handset industry share, Q1 2013 (%)
Apple Samsung All other
Source:Apple, Samsung, Enders Analysis11
Dominance of Apple & Samsung

12. Industry scale
Mobile networks
Advertising
Mobile phones
PCs
Apple
Books
Online advertising
Amazon
Google
Recorded music
Facebook
0 250 500 750 1,000 1,250
2012 global revenue ($bn)
Source: Zenith,Apple,Amazon, Google (excludes Motorola Mobility), Facebook, Enders Analysis12

13. 0
15
30
45
60
Jun-2010 Dec-2010 Jun-2011 Dec-2011 Jun-2012 Dec-2012
Global unit sales (m)
Laptops Desktops Tablets
Tablets overtaking PCs
13 Source: Gartner, IDC, Enders Analysis

14. 0
10
20
30
40
50
Jun-2010 Dec-2010 Jun-2011 Dec-2011 Jun-2012 Dec-2012
Global unit sales (m)
iPad Branded Android Kindle Fire Nexus
120m tablets in 2012 - 66m iPads
Source:Apple, Google,Asus, Enders Analysis14

15. • Well over 200m tablets will be sold in 2013
• Driven by size and price - 7” screens, $300 and (far below)
• A flood of cheap generic Chinese Androids - perhaps 125m
units in China alone this year, with prices under $150
• Not clear these compete directly with Apple, Samsung &
Google
Tablets in 2013
15

16. 0
25
50
75
100
Jan 2009 Dec 2009 Dec 2010 Dec 2011 Dec 2012
US Google search volume (indexed)
kindle kindle fire nook
Weakening interest in ereaders
Source: Google16

17. iPad dominates use everywhere
0
20
40
60
80
100
US UK Germany France Japan China
Share of tablet web traffic, February 2013 (%)
iPad Android Kindle Fire Nook
Source:Adobe17

18. Amazon
-10
0
10
20
30
40
50
60
70
1995 1997 1999 2001 2003 2005 2007 2009 2011
Annual results ($bn)
Revenue Net income
Source:Amazon18

19. 0
2
4
6
8
10
Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13
Amazon North American revenue ($bn)
Media revenue General merchandise & other revenue
Source:Amazon19
21st Century Sears Roebuck

20. 0%
1%
2%
4%
5%
6%
7%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Ecommerce as % US retail revenue
Much more ecommerce to come
Source: BLS, Enders Analysis20

21. ‘Four horsemen’
Apple Google Facebook Amazon
21

22. 0
200
400
600
800
Mar-10 Sept-10 Mar-11 Sept-11 Mar-12 Sept-12 Mar-13
Active users (m)
Apple iOS Google Android Facebook mobile users Amazon accounts
22 Source:Apple, Google, Facebook,Amazon, Enders Analysis
Ecosystem sizes

23. • Apple and Google’s Android have won
• Unlikely that other platforms will be relevant (Windows
Phone, Blackberry, other newer efforts)
• But share of value and use between Apple and Android is fluid
• Google’s control of Android is partial - Amazon Kindle,
Chinese Android, Samsung intentions unclear
• Facebook and Amazon trying to extract value
23
Platform wars

24. 24
For Apple, the
ecosystem is what
sells hardware
For Amazon, Google
and Facebook, the
experience on the
phone is what drives
engagement with all
their services
Ecosystem is the key leverage
point